When business is going well, the next logical step is to use that upward momentum for growth and expansion. One way to quickly branch out into a new market all at once is by acquiring another business and all of its resources, but this is not a one-size-fits-all solution.
Each company has its own unique culture defined by its goals, ideals, and methodologies. Acquiring a different company may seem like a profitable business decision on the surface, but it can quickly become a failed investment if the two entities cannot integrate on a cultural level.
Each entity should share similar goals
Research shows that at least 70% of mergers and acquisitions fail, and many of those failures arise from a fundamental difference in goals. For example, a company that prioritizes customer satisfaction might never see eye-to-eye with a company that prioritizes profit and financial success above all else. Conflicting leadership styles will likely create friction at every point of contact between the two entities at every attempt to integrate.
You can build a new culture based on shared ideals
Even if two companies have slightly different goals, finding common ground can create amazing opportunities in an acquisition. Consider how your company’s ideals can integrate with those of your potential acquisition and how this unification can create opportunities that capitalize on both entities’ strengths.
Not every acquisition is a profitable opportunity. Before investing in a merger, take a careful look at the other company to see if their culture clashes or aligns with your own.